Trade and regional growth in Spain: panel cointegration in a small sample |
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Authors: | Frédéric Laurin |
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Institution: | 1. Département des sciences de la gestion , Université du Québec à Trois-Rivières , 3351, boul. des Forges, C.P. 500, Trois-Rivières, Quebec, G9A 5H7, Canada;2. Center for Operations Research and Econometrics (CORE), Université Catholique de Louvain , 1 Place de l'Université B-1348 Louvain-la-Neuve, Belgique frederic.laurin@uqtr.ca |
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Abstract: | In this article, we test for the existence of a relationship between per capita Gross Domestic Product (GDP) and trade, for 15 Spanish Autonomous Communities between 1988 and 2004, using a panel cointegration methodology. In particular, we implement several panel unit root tests (Maddala and Wu, 1999; Levin et al., 2002; Im et al., 2003) and panel cointegration tests (Pedroni, 1999, 2004), with a special attention to their behaviour in a small sample. We also develop a Seemingly Unrelated Regression Estimation (SURE) residual based test, in order to explicitly take into account the cross regional correlation pattern. Appropriate confidence intervals are estimated with a sieve bootstrap designed for our small time sample, preserving the dependence structure among cross sectional units. Our cointegration tests reject the existence of a significant relationship between GDP per capita and exports. However, we do find some evidence of a significant relationship between GDP per capita and imports or with total trade. |
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Keywords: | IPO underpricing institutions legal infrastructure panel data |
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